Dealmaker: Island Capital Group Acquires New York’s Lexington Hotel for $185M
Island Capital Group LLC, New York, acquired the Lexington Hotel in Midtown Manhattan for $185 million in a joint venture with MCR Investors LLC and Three Wall Capital LLC.
Seller DiamondRock Hospitality Co., Bethesda, Md. acquired the property at the corner of Lexington Avenue and 48th Street in 2011.
The Lexington Hotel opened in 1929 and achieved landmark status in 2016 as an architecturally significant property located along Lexington Avenue’s “hotel alley.” Since opening more than 90 years ago, the Lexington Hotel has served as a home to historic figures including Marilyn Monroe, Joe DiMaggio and Ella Fitzgerald.
Island Capital Managing Member, Chairman and CEO Andrew Farkas said he is confident New York City will bounce back from what has been a very challenging time in the city’s history. “We are doing our part to be a significant part of that recovery and we are well-positioned to capitalize on the return of New York’s booming hospitality industry,” he said.
The Lexington Hotel closed in March 2020 due to the COVID-19 pandemic but the new ownership expects to re-open it this summer. Island Capital Group said nearly 140 million square feet of office space as well prominent tourist attractions Times Square, Grand Central Terminal and Rockefeller Center will drive demand for the property.
Law firm Fried Frank advised MCR Development on the acquisition. The Fried Frank team included Corporate Real Estate Partner Patrick Dowd, Real Estate Partners Jonathan Mechanic and Avi David Feinberg, Tax Partner Libin Zhang, Corporate Real Estate Associate William Kelly and Real Estate Associate Brian Helweil.
MCR Development will manage hotel operations under the Marriott International Autograph Collection brand.